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08.15.2013 EEOC’S Latest Investigative Tactic: Trolling For Plaintiffs Through Your Company’s Computer Network

BY: MARY E. PIVEC & LAURA D. WINDSOR

Imagine that one morning, all of your employees log on to your company’s computer network ready to start their work day, and instead, find an email message in their Inboxes from the United States Equal Employment Opportunity Commission (“EEOC”).  The email states that the EEOC is conducting an official investigation into allegations that your company has discriminated against job applicants and employees over the past 55 months.  Your employees are asked to assist the EEOC in determining whether anyone’s rights “may have been violated” by your company by completing an on-line questionnaire. The message provides assurance that federal law prohibits your company and future employers from retaliating against them because of their participation in an EEOC investigation. 

Does this scenario seem too outrageous to ever happen at your company?  Think again.   On June 5, 2013, the EEOC dispatched 1,330 such emails to current and former employees of Case New Holland, Inc. and CNH America LLC (“CNH”), including more than 300 current and former management officials (whose responses could be used by the EEOC as admissions of the company itself).  The EEOC sent these emails without informing or seeking consent from CNH beforehand.  CNH immediately questioned EEOC’s legal authority to use CNH’s computer network and email system to contact its employees, and CNH pursued its inquiry all the way up the chain of command at the EEOC.  Instead of providing a response to CNH’s questions, senior EEOC officials informed CNH that the agency reserved the right to undertake yet another mass email distribution to CNH employees, and it also refused CNH’s request to withhold distribution of employees’ questionnaire responses to third parties.

How Did the EEOC Gain Access to the Work And Personal Addresses of CNH Employees?

No doubt you are wondering how the EEOC obtained 1330 business and personal email addresses of current and former CNH employees and managers.   The answer is simple.  The agency mined electronic human resources files that CNH voluntarily provided to the agency in response to a request for records accompanying a March 29, 2011 “target” letter that announced that the EEOC was pursuing a nationwide investigation of the company under the federal Age Discrimination in Employment Act (ADEA).  CNH was asked to produce information about the software and architectural components of its human resources data systems, as well as computerized files relating to applicants and employees of the company and 44 identified affiliates with respect to the application process, hiring, promotions, job analyses and evaluations, performance evaluations, employment and educational history, amounts of pay, adjustments to pay, benefits, work assignments, adjustments to work assignments, payroll and layoffs, discharges, and terminations.  Notwithstanding the breadth of the EEOC’s information request, CNH voluntarily cooperated with the investigation and ultimately produced over 600 megabytes of information.  Following this production in January 2012, CNH heard nothing from the EEOC prior to being subjected to the surprise June 5, 2013 email blitz.

The Scope of the EEOC’s Investigative Authority under the ADEA

Why would an employer like CNH voluntarily produce massive quantities of human resource records without a legal challenge, particularly since neither the company nor any of its 44 affiliates had been served with notice of a timely filed charge of a pattern or practice of systemic age discrimination in employment?  CNH’s lawyers likely advised that the federal courts have upheld the EEOC’s exercise of subpoena authority to demand the production of computerized human resource files pursuant to the federal Fair Labor Standards Act (FLSA).  Further, counsel would have advised that EEOC Commissioners have delegated this subpoena authority to the EEOC’s General Counsel, the Director of the Office of Field programs, District Directors, Field Directors, and to the designees of these officials. 

Given the fact that the EEOC could have subpoenaed the requested records and sought enforcement in federal district court if CNH refused to comply, CNH apparently made a business decision to cooperate with the Philadelphia District Office’s systemic age discrimination investigation.  Unfortunately, the EEOC rewarded CNH’s demonstration of good faith with a surprise, first-time-ever email blitz made possible through the use of human resources data that CNH produced in response to the agency’s request for information.

CNH Files Suit against the EEOC

The EEOC’s authority to investigate employers for violations of the nation’s anti-discrimination laws is not unlimited, however.  Generally speaking, the EEOC must execute its investigations within the bounds of its own regulations and without violating the constitutional rights of employers.

On August 1, 2013, CNH filed suit against the EEOC and its lead investigator in the United States District Court for the District of Columbia, charging that the defendants violated the federal Administrative Procedure Act and the constitutional rights of CNH under both the Fourth Amendment search and seizure clause and Fifth Amendment takings clause through its unauthorized use of CNH’s business email systems and its unannounced, ex-parte investigative surveys of company managers.   The Government has 60 days to respond to the Complaint.

Why the CNH Lawsuit Is Important

The CNH lawsuit raises issues of first impression in federal court that are important to every employer subject to investigation under the federal discrimination laws and the minimum wage and overtime provisions of the FLSA.  If the court upholds the EEOC’s authority (and, implicitly, the Secretary of Labor’s authority) to obtain business and personal email addresses from employers, it could open the door to numerous independent investigations that thus far have been limited due to a lack of agency resources.   

Williams Mullen will be following the CNH lawsuit closely to keep clients informed of major developments and the ultimate outcome of the litigation given the significance of the issues at stake for employers.

What Employers Can Do To Protect Themselves From Unauthorized Government Access to Business Email Systems

If CNH had been warned of the possibility that the EEOC would attempt to communicate with employees through the company’s email network, it might have taken action to block such communications from reaching employees.   This would have forced the EEOC to resort to more traditional methods of identifying potential victims of discrimination such as the mails.  Alternatively, the EEOC might have filed a warrant to access CNH’s business email system for the purpose of asking workers to respond to the agency’s investigative questionnaire.  This would certainly have been preferable because CNH would have had the opportunity in the EEOC civil enforcement proceedings to object to ex parte communications with management personnel and to challenge the used of biased and ambiguous survey terms before the EEOC had a chance to distribute its questionnaire to employees. 

Unfortunately, CNH had no grounds for anticipating that the EEOC would take the action it did.    Now that the EEOC’s new tactic has been exposed, any employer targeted by the EEOC for a systemic investigation should consult with counsel about strategies for avoiding the kind of widespread, unauthorized use of your business network that CNH experienced.    

If your company is named as a respondent in an EEOC investigation or enforcement action, a Williams Mullen labor & employment attorney will be happy to assist you.